Investing

This Is the Worst Run State in America

State governments are constitutionally granted the power to control taxes, make and enforce laws, and regulate commerce within their borders. With these tools, state governments across the country are ultimately responsible for keeping safe streets, balancing the budget, and promoting economic vitality. Some states have proven to be more adept than others at achieving these goals.

For the 11th consecutive year, 24/7 Wall St. reviewed economic indicators, budget allocations, and state balance sheets, in addition to a range of social measures to rank how well each state is run. Data came from a wide range of public and private sources, including public policy think tank The Pew Charitable Trusts and the U.S. Census Bureau.

Several indicators can point to fiscal mismanagement at the state level, including a minimal rainy day fund — funds set aside for budget emergencies — and less-than-perfect credit rating scores from ratings agencies. Many of these states are ranked lower on this list. Lower-ranking states also tend to have an underfunded pension system. Many states are facing a pension crisis, with pension obligations far outweighing available funds. Here is a look at every state’s pension crisis, ranked.

The ongoing public health and economic crises that have resulted from the COVID-19 pandemic demonstrate the wide range of ways that state governments across the country can respond to similar challenges. In recent months, some states have kept businesses open in the interest of economic vitality, often at the risk of spreading the virus more widely and rapidly. Others, meanwhile, have opted to shut down large segments of the economy in the hopes of slowing the virus’s spread. These different approaches reflect governments’ different priorities, and each has contributed to vastly different outcomes.

It is important to note, however, that public health and economic data used to create this list are for 2019 and earlier. As a result, COVID-19 has not impacted this year’s rankings of the best and worst-run states. Additionally, a state’s relative ranking on this list is not necessarily attributable to sitting elected officials as governing strategies and budget priorities can have consequences that extend far beyond the tenure of those who set them.

See the methodology for the state management story here.

This is 24/7 Wall St.’s worst-run state in America:

Mississippi
> 2019 unemployment: 5.4% (2nd highest)
> Pension funded ratio: 62.6% (12th lowest)
> 1 yr. GDP growth: +0.6% (5th lowest)
> Poverty rate: 19.6% (the highest)
> Moody’s credit rating and outlook: Aa2/Stable

Mississippi has ranked no better than fourth worst in the last seven years, but this is the first year it has ranked as the worst run state in the country. Like Louisiana, Mississippi’s low ranking is closely tied to the low well-being of its population. Mississippi has the highest poverty rate in the country, at 19.6%, compared to the national rate of 12.3%. The state ranks among the five worst in important socioeconomic and health measures, including health insurance coverage, high school and college attainment, unemployment, home value, and life expectancy at birth.

The state’s GDP per capita of $34,493 is the lowest of any state and $23,671 lower than the national GDP per capita.